Produced by Christopher J. Conover, Duke University using data from 2017 KFF/HRET Employer Health Benefits Survey and BLS data.

Fig. 1

Fig. 1 is the simplest way I could think to make my point. Using the most authoritative available figures on premium costs for employer-sponsored health coverage (which now span nearly 2 decades), I calculated the average amount of premiums (including both payments by the employer and employee) paid for every dollar of wages paid to the average worker [1].

As you can plainly see, regardless of whether we use premiums for single coverage or family coverage, this ratio has risen rather steadily from 1999-2017. ACA detractors will note that for family coverage, the ratio for family coverage has grown by 1/6 just since 2010 when Obamacare was enacted (for single coverage, the ratio has increased by 20%). ACA supporters will note that the ratio held steady for family coverage between 2016 and 2017 and for single coverage for the period 2013-2016.

Skeptics will point out that the same thing happened between 2009 and 2010 for family coverage, before Obamacare took effect [2] and there was an even longer period from 2006-2009 during which the ratio stayed constant for single coverage. Yet I recall no kudos accorded to President Bush for having held the line on health insurance premiums during the tail end of his term in office. Quite the contrary: Democrats deemed the crisis in health care so severe as to justify passage of a massive bill to fix the problem on a party-line vote.

If we're to be honest, the only obvious Obamacare-related impact on premiums occurred with the noticeable jump in this ratio between 2010 and 2011. This was the result of provisions that became effective in September 2010, including coverage of dependent children up to age 26 on their parents' health plans, the elimination of lifetime limits on coverage and the phase-out of annual limits on coverage (detailed in this Fact Sheet).

What is most definitely clear from these trend data is that there is no sign whatsoever of the purported $2,500 in annual savings that then-President Obama promised would be enjoyed by the average family. Unlike his claim that if you like your plan you can keep it--ultimately deemed 2013 Lie of the Year by PolitiFact--I view the ex-president's claim about premium savings to be a broken promise rather than I lie since my impression is that he actually believed it (however fantastical that seems in hindsight).

The bottom line is that whatever else you can say about what Obamacare achieved on the coverage front, it manifestly has not done anything to slow the steady rise of employer health insurance premiums vis-a-vis wages. If anything, this misguided law somewhat aggravated matters. And informed readers are presumably well aware that in the non-group market, results were considerably more disastrous insofar as they have resulted in a doubling of average premiums on the Obamacare exchanges between 2013 and 2017.

In short, rising health costs were a problem before Obamacare and that problem continues to persist despite an enormously expensive law purportedly designed to fix it. Indeed, the most serious provision that might have tackled the cost-inducing employer tax exclusion--the so-called Cadillac Tax--was originally postponed until 2018 (under union pressure) and then postponed again until 2020 under a budget deal passed on December 18, 2015. More recently, on July 27, 2017, the Senate Republicans voted on a strict party line vote (52-48) to repeal the Cadillac tax entirely. In late July, I suggested that tax reform offers a golden opportunity to do something about the employer tax exclusion once and for all. But as details of what the Republicans intend to include in tax reform there has not even scintilla of interest expressed for taking on this sacred cow.

Controlling rising health costs is not a problem that can or should be ignored by the current administration. But whether it has the willingness or skill to do anything about it remains to be seen. The evidence to date is not very encouraging.

READ CHRIS’ BOOK, The American Health Economy Illustrated (AEI Press, 2012), available at Amazon and other major retailers or as apdfat AEI. With generous support from the National Research Initiative at the American Enterprise Institute, anonline version complete with downloadable Powerpoint slides and companion spreadsheets has been made available through the Medical Industry Institute’s Open EducationHub at the University of Minnesota.